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Supercomputer maker Cray has said it's going to be a thin couple of quarters until it begins shipping new "Baker" systems in Q3. But the company's Custom Engineering group, which does bespoke design work on behalf of clients, is hoping to fill in some of that gap. A deal announced today between cloud computing wannabe Microsoft and Cray could result in some substantial money.

Cray said this morning that Microsoft Research has engaged the Custom Engineering group to research and prototype "a system that could provide a glimpse into the future of cloud computing infrastructure." When pressed about what exactly the two are up to, sources at Cray said that the purpose of the engagement was to come up with and prototype a new kind of system and that the details were, by the very nature of the deal, not even close to hammered out yet.

The companies obviously did talk money, but neither Cray nor Microsoft divulged how large the contract is. A spokesperson at Cray said that it was enough money to warrant a press release.

Well, yes.

Christian Belady, director of hardware architecture for Microsoft's Extreme Computing Group, said what you would expect an IT vendor to say: that the goal of the project was to reduce the total cost of ownership for systems while boosting performance.

Uh-huh.

Cray did say that the engagement with the Custom Engineering folk would see Cray design a cloud computing system infrastructure that combines "super-efficient power delivery, high-density packaging, and innovative cooling technologies" that would help cut facility, power, and hardware costs.

This is the first custom engineering engagement that Cray has done outside of the traditional scientific and technical high-performance computing arena. But arguably, the problems that large supercomputer centers running scientific applications and those faced by systems running hyperscale Web and financial applications are not as different as people might think.

Cray established its Custom Engineering group as a means of diversifying its business two years ago, and in 2009, that business grew to more than $30m, up more than 400 per cent. While it will probably only grow at half that rate or less this year (perhaps doubling and maybe tripling, the laws of growth being what they are), this is a very material business for Cray, which had sales of $284m in 2009. Cray is expecting sales of $305m to $325m in 2010, with services revenues of about $110m. Custom engineering could be more than half of that services revenue.

The Extreme Computing Group at Microsoft Research was formed in June 2009, and Dan Reed, who used to run a unit called Cloud Computing Futures, is in charge of this new group. CCF, you will remember, dabbled in low-energy, cloudy infrastructure such as the sleepy servers El Reg told you about a year ago, and Reed headed up that effort.

While the CCF unit is devoted to researching various cloud architectures, the ECG umbrella organization that wraps around it is focused on many of the same HPC challenges that IBM, Cray, and others have been chasing government funds to crack: security, cryptography, operating system design, parallel programming models, cloud software, data center architectures, specialty hardware accelerators, and quantum computing.

Microsoft must be sorely tempted to just go into the supercomputer and data center business itself and chase all that government money directly. But thus far it has dabbled here and there, partnering with Cray and Intel for baby supercomputers and hoping that Windows HPC Server 2008 gets some traction. But the money is in the kinds of things that Cray knows and Microsoft needs to learn.

What is amazing is that Microsoft has not yet snapped up all the smart HPC and data center people and tried to drive companies like Cray out of the market. As Microsoft and its Azure compute cloud grows in use and sophistication, don't be surprised when it happens many years hence. And to think, if that does come to pass, Cray will have sown the seeds of its own destruction. Or absorption into the Bill G. collective. ®